Business Capital Fund (BCF) Revolving Loan Fund Resource Guide and Application

Mississippi River Regional Planning Commission - MRRPC

1707 Main Street, Suite 435, La Crosse, WI 54601

BUSINESS CAPITAL FUND (BCF) REVOLVING LOAN FUND RESOURCE GUIDE AND APPLICATION

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Business Capital Fund (BCF) Revolving Loan Fund Resource Guide and Application

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Business Capital Fund (BCF) Revolving Loan Fund Resource Guide and Application

What is the Revolving Loan Fund (RLF)? The Business Capital Fund (BCF) is a revolving loan fund (RLF) developed by the Mississippi River Regional Planning Commission to address a gap in private capital markets for fixed rate, low down payment, low interest financing. The Fund is targeted to businesses in Buffalo, Jackson, Pepin, Pierce, and Trempealeau Counties. The Fund serves as a stimulant for commercial lending and not a substitute for private capital.

How was the fund created? Initially the Business Capital Fund was capitalized at $667,000 in 1990. A $500,000 federal grant (75%) was provided from the U.S. Department of Commerce-Economic Development Administration and another $167,000 (25%) in matching contributions was raised from local units of government, lending institutions, utilities and businesses. An additional grant was awarded to the MRRPC after the flood of 1993 that allowed Pierce County to be served by BCF lending.

What is the goal of the fund? The overall goal of the fund is to improve the area economy by providing "Gap" financing for business expansions that create jobs. The Business Capital Fund is self-perpetuating through loan repayments by borrowers. The designation of the Business Capital Fund as a revolving loan fund is derived from this lend and repayment activity. This revolving characteristic will allow it to serve as a long-term loan source for expanding business well into the future.

How will this fund achieve its goal? It will meet its goal by providing reasonable loan terms, low down payment requirements and below market rate financing. These favorable terms from the Business Capital Fund will allow a participating lending institution to take a business loan risk they normally would not take. In so doing a business expansion results and jobs are created that under ordinary circumstances would not have occurred. In all instances the BCF loan will be in conjunction with a larger private loan.

Why is the fund needed? Small businesses create the most jobs, but suffer from a shortage of gap financing. Eighty percent of the new jobs in the nation and the great majority of jobs in western Wisconsin are created by businesses employing less than 100 people.

Ironically those businesses which create the most new jobs are the least able to obtain reasonable financing for job creating plant expansions. Because of the shortage of gap financing, small businesses are frequently unable to match the term of financing with the length of life of the asset.

How is the fund managed? The Mississippi River Regional Planning Commission (MRRPC) is the federal grant recipient. The MRRPC has delegated loan decision and administrative responsibilities to the nine-member Board of Directors of the Business Capital Fund Corporation. This Board of Directors at various times includes representation from financial institutions, local units of government, utilities, and local development organizations.

Are There Any Federal Requirements? Loan recipients are required to adhere to several Federal regulations such as National Environmental Policy Act, Civil Rights Act, Davis Bacon Act, Flood Disaster Protection Act, and National Historic Preservation Act. A certificate of non-relocation is also required. The MRRPC staff serving as the RLF administrator will inform the borrower of the above and any other Federal regulations they are required to adhere to.

Is There an Application Fee? All loan closing costs will be paid for by the borrower. A $100 fee is required to cover administrative costs of the Business Capital Fund to review and act on each application. If the loan is approved by the Business Capital Fund Loan Board an additional $100 fee is required to cover administrative expenses for monitoring special provisions of the loan relating to employment commitments, civil rights, and the environment.

Who to contact for additional information? Mississippi River Regional Planning Commission, 1707 Main Street, Suite 435, La, WI 56401, Telephone: (608) 785-9396, Fax: (608) 785-9394, Email: , Website: mrrpc.com


MISSISSIPPI RIVER REGIONAL PLANNING COMMISSION (MRRPC)/BUSINESS CAPITAL FUND RLF— EMPLOYMENT AND FINANCING DATA

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Business Capital Fund (BCF) Revolving Loan Fund Resource Guide and Application

CURRENT AND PROJECTED EMPLOYMENT
Employment Projections
Type of Employment / Existing Jobs / First Year / Second Year
Professional/Mgr/Technical / FT / PT / FT / PT / FT / PT
Skilled / FT / PT / FT / PT / FT / PT
Unskilled/Semi-Skilled / FT / PT / FT / PT / FT / PT
TOTALS / FT / PT / FT / PT / FT / PT
SOURCES & USES OF FUNDS: / RLF / Bank / Equity / [ ] / [ ] / Total
Acquire Land / $ / $ / $ / $ / $ / $
Acquire Building / $ / $ / $ / $ / $ / $
Improve/Renovate Building / $ / $ / $ / $ / $ / $
Purchase Equipment/Machinery / $ / $ / $ / $ / $ / $
Inventory / $ / $ / $ / $ / $ / $
Working Capital / $ / $ / $ / $ / $ / $
Other / $ / $ / $ / $ / $ / $
Other / $ / $ / $ / $ / $ / $
Other / $ / $ / $ / $ / $ / $
TOTALS / $ / $ / $ / $ / $ / $
PROJECT SUMMARY: / RLF / Bank / [ ] / [ ]
Loan Amount / $ / $ / $ / $
Loan Term (Years)
Loan Interest Rate / % / %
Annual Debt Service / $ / $ / $ / $
Type of Collateral
Security Position
Type of Guarantee

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